(Amusing Note: I know brands need to be unique in this day in age, however in writing this article, just the title and first paragraph, I failed twice to spell “Shomi” correctly. I would think Rogers and Shaw will have their work cut out for them so that average consumer can actually spell this “brand”. In fact, in writing this special note I incorrectly spelt “Showmi”. Sigh…)
Let the bandwidth wars begin. Oh yes we all enjoy copious amounts of bandwidth into our homes, but as we get more dependent on steaming? Expect to pay for that luxury of streaming. Ultimately it goes something like this. Get people into their comfort zone with a service that is free or super cheap and then when the time is right (when all vested parties happen to move in the same direction at the same time) they can charge money or they can create more strict guidelines for what’s free and what’s not free.
To summarize, I’m essentially suggesting that Netflix is really the enemy of Telus, Shaw and others. The feeble on demand services are just that. Shomi IS to be Rogers and Shaw’s attempt at competing with Netflix. Based on what I’ve read, Shomi has a big hill to climb. First, a lot of Canadians already have Netflix subscription. I’ve heard that 1/3 of English speaking Canada already has a subscription to Netflix. Yikes! Second, there seems to be strong negativity towards either Rogers, Shaw or both. Third, Android TV boxes are going to be spreading like wild fire in 2014 and 2015 and may actually be the biggest threat out there.
Well, the most obvious way is to save Canadians money. A cheaper monthly subscription has to be considered essential. Having said that, on the Shomi website it’s showing a suggested price of $8.99/month which happens to be the same price as Netflix.
Beyond that, Shomi is going to need a nice juicy free trial that gets people at least in the door. A lengthy free trial will help Shomi in the long run.
Shomi is initially going to be launching only for Shaw or Rogers subscribers in the “beta” phase. It goes without saying that Shomi needs to bring in customers from the competition such as Bell and Telus if they plan on making a ripple on the pond with this service. Perhaps the kinks gets ironed out in the beta, then it will be open to the entire marketplace.
How about Shomi hockey? Rogers are the ones who scored big with the NHL broadcast rights in Canada. Utilizing Shomi for sports, in particular hockey, is something that most Canadians would be interested in. Face it, hockey is part of Canadian culture and with all the games that Rogers can show, it makes sense for them to utilize their unique content that Netflix users simply can’t get. All the folks ripping Rogers about Shomi would most likely have a complete turn about face once NHL game streaming pops up in the ads. To be clear, there was no mention anywhere in the Shomi marketing and press releases about having sports or NHL streaming available. That isn’t to say it won’t be included in the future. To me it’s essential to achieve any traction in Canada.
I know from personal experience how awful YouTube can be when in comes to inappropriate content for kids. Depending on what channels you subscribe to with cable, you likely have concerns regarding what your kids can access. The internet obviously can be a very unsafe place for kids. So far it seems that Shomi offers a robust and excellent kid friendly interface. Let’s have a closer look.
First, Shomi allows you to create up to six different profiles with your account. That means each child of yours can have their very own customizable profile and you can choose specific levels of parental control.
In the screenshot above, you can see the unique and customizable profile images. It appears that “Tim” and “Sandy” are the kids in the house.
Next let’s take a closer look at the profile creation page where you can ensure a kid safe experience on Shomi.
In the screenshot above, you can see that the Profile Image can be set with a variety of kid friendly images that they can choose from. You can select kids profile which in turn will limit access to only C, C8, G and PG content. It seems that there needs to be another layer of choice for content for the real young kids. Is PG good for an 8 year old? Not sure about that. I hope that Shomi executives haven’t assumed that 8 year olds won’t be capable of accessing Shomi on their own. Kids can and kids will. They understand technology better than old folks! I also realize that the screenshot is from the beta Shomi so keep that in mind also.
This may seem like a minor quibble, but to me this troubles me. When this service was initially unveiled in the Summer 2014, they marketed the Xbox 360 as being one of the “favorite devices” from you can use with Shomi. The service itself doesn’t launch until November 2014. That would put the Xbox 360 in the overall world of relevance? Pretty much out of the picture in my mind. Think about it. The Xbox One came out in the Fall 2013, yet this brand new Shomi service is touting the Xbox 360 as a streaming device? That just rubs me the wrong way. In a sense it makes me wonder just how current or aware the executives are who have created this Shomi service. You’re trying to market this as the next great thing, yet it’s going to work on Xbox 360. I hope it’s much ado about nothing. The consumers in Canada are savvy. They know the Xbox 360 is dated. I’m sure there is a legitimate reason why the Xbox One can’t be marketed, but if you can’t get the current console, then why bother?
It appears too that Shomi isn’t going to be aggressively priced, but instead will match the pricing of Netflix. Once people are familiar and comfortable, prying those Netflix subscribers away is going to be a hard sell. It’s possible too that Rogers and Shaw see this platform as a method of staying current and maintain their market share. In other words their initial roll out need not be super aggressive. If there isn’t a savings to be had vs. Netflix, then I certainly find that troubling.
For new Netflix subscribers, you will pay $8.99 in Canada which will be the same price as Shomi. From that perspective is appears that the expectation from the executives is that Shomi is not out to tackle or dent Netflix subscriptions in Canada. Rather, some experts are suggesting that consumers out there are going to use multiple monthly subscription services at one time. So having a subscription to Netflix and Shomi at the same time may in fact be the logic here. You may already be questioning the strategy of launching a service in hopes that people will sign up for two streaming movie services at the same time. Perhaps it’s not a redundant as one might think.
Here’s another aspect to this situation. Is $8.99 per month really that expensive? We’re talking about access to thousands of programs and movies. Are you part of the Blockbuster era? Remember the price we paid for a new movie rental. That’s one movie remember which you had to leave your house to get. Today if you want to rent movie from Redbox, you’re paying $1.50 for a DVD or $2.00 for a BluRay version. That’s just one comparison.
Let’s look at what you pay for a movie channel with your cable subscription. How about up to $18 per month for Super Channel? If you want to add a theme pack (a bundle of about 5 specialty channels) to you cable subscription, isn’t that likely at least $6 more per month? In that sense, perhaps Shomi isn’t that bad in terms of pricing. If anything Shomi might cause the current pricing of “on demand” movies to drop which would be a good thing. From what I know, you can currently pay up to $7 for one movie through an on-demand service!
You should also consider what you’re paying if you’re a gamer. Do you buy yearly EA Sports games? That’s about $60 per year, per title if you buy for the PS4 or Xbox One. Breaking that into a monthly cost, you’re paying $5 ever year for that game. If you signed up and paid for Xbox Live, that costs around $60 also, so that’s $5 per month. PlayStation Plus is around $50 per year. When you look at the reality from a different perspective, you realize that you’re paying a lot for other services which have basically tied you into a subscription without even realizing it. I find that yearly game releases, the must haves like Call of Duty or EA Sports NHL, add up to what is essentially a monthly/yearly commitment. It shows that paying $8.99 per month might not be that absurd or even having a dual subscription to Netflix and Shomi at the same time isn’t unreasonable.
There is something somewhat ironic or counter productive in having Shaw and Rogers launch Shomi. It’s a major strategic decision because think of it this way. Shomi is doing what Netflix does. And that is? It’s somewhat of a cable replacement. It’s a movies on demand replacement. It’s a cheaper alternative than paying for channel bundles isn’t it? You bet it is. Therefore, Shomi is going to actually replace existing money makers that Shaw and Rogers are currently enjoying. This makes the move even more interesting. I’m pretty darn sure that the money is to be made in cable channels, bundles and on demand movies. Shomi looks to replace or cause some redundancy with their very own customers. Imagine that you cancel out some extra channels and the occasional on demand movie for the $8.99 per month Shomi service. Because this lacks a bit of business logic, obviously this is about customer acquisition and pricing enticements in the future.
